updated 06:03 am EDT, Mon October 8, 2012

Congress asks US firms to stop fueling expansion of Huawei, ZTE

A draft Congress report due today argues that leading Chinese telecoms producers Huawei and ZTE should be locked out of the U.S. market over security concerns, reports Reuters. The US House of Representatives' Intelligence Committee argues that the two companies are subject to the influence of the Chinese government. After 11-months of research, the committee believes that it is in the best interests of U.S. firms and the country to avoid purchasing products from either Huawei or ZTE.

"Baseless suggestions otherwise or purporting that Huawei is somehow uniquely vulnerable to cyber mischief ignore technical and commercial realities, recklessly threaten American jobs and innovation, do nothing to protect national security, and should be exposed as dangerous political distractions from legitimate public-private initiatives to address what are global and industry-wide cyber challenges," said Huawei spokesman William Plummer in an e-mail statement to Reuters.

ZTE responded by issuing a copy of a letter it sent to the committee, where it states that it "profoundly disagrees" with claims that it is under the influence of the Chinese government for purposes of espionage. The Chinese foreign ministry, for its part, argued that the U.S. need to "set aside prejudices" in the name of Sino-American economic and trade ties.

The committee is said to have been swayed in its adverse findings against Huawei and ZTE because the two companies allegedly failed to fully comply with requests for documentation. The committee wanted information about any formal arrangements or otherwise between the companies and the Chinese government. The panel chairman stated that U.S. firms should "find another vendor if you care about your intellectual property; if you care about your consumers' privacy and you care about the national security of the United States of America."